Thread: 2010 Mid-year forecast strong growth S. America and Asia

2010 Mid-year forecast

Politics / US Politics
Jul 20, 2010 - 03:28 AM

By: David_Urban

Political and Economic Commentary - Six months into 2010 and everything is unfolding much as planned. That is not a lack of confidence but rather this unpredictable market is acting as it should act given the economic and political crosscurrents pulling the markets in a volatile and sideways pattern.

The ascent of the 'Tea Party' movement should not be surprising as calls for a third party always ring loud in a recession or early recovery when times look bleak. While the Tea Party movement looks to continue its spring primary momentum into the fall elections, I would like to hearken back to a point made at the beginning of the year. A sitting President's party typically loses approximately 26 House seats and a couple of Senate seats during its first election.

When new President takes over the Oval Office, they feel obligated to push through their mandate for change but run into bureaucratic inertia, which leads to a backlash.

Looking back into history to the early 90's when the US economy was dealing with the collapse of the Savings & Loan industry, there was a call for a change in politics and we saw the ascent of Ross Perot and his third party. As the economy was struggling along and just beginning to grow again, a Democrat Bill Clinton was elected to the White House and there were calls by the Republican Party for a “Contract with Americaâ€

According to the Bureau of Labor Statistics over one million people dropped out of the workforce in the past two months. If accurate, this creates a massive grey market for unemployed workers that will needs to be cleared before we start to see a meaningful recovery much in the way the tech sector needed to clear the grey market from collapsed dot coms and the housing market needs to clear homes in unreported inventories before we can recover.

Wake up America ~ U-6 Unemployment is already at 22.6 percent

NOT the Fluffy 9.5 percent the government is projecting